The competitive pressure of Long Chau from other chains has not yet affected its growth due to its different orientation and potential pharmaceutical market.
FPT Digital Retail Joint Stock Company (HoSE: FRT) has recently successfully held the Annual General Meeting of Shareholders 2022. At the meeting, FRT leaders answer many questions from the shareholders about the growth of FPT Shop and Long Chau chain.
Long Chau expects the profit of VND 50-100 billion
FRT says they are always looking for potential sectors to support the growth of pharmaceutical segment. This is to help the Company develop sustainably and bring the best benefits to the shareholders.
This year, FRT expects Long Chau’s profit will reach VND 50-100 billion. However, FRT also says that the profit will depend on the speed of opening Long Chau new stores and long-term investment level. In addition, the revenue for a Long Chau pharmacy to reach break-even point depends on many factors: store size, rent, area, so it will range from VND 500 million to VND 2 billion.
The An Khang pharmacy chain of rival Mobile World is planning to expand. Facing this matter, FRT believes that the pharmaceutical market is still very potential. Accordingly, the whole market has 57,000 drugstores. Therefore, the opportunity to expand the pharmacy chains is very promising. Regarding the IPO of Long Chau chain, FRT leaves it open and says that it will carefully evaluate to choose the most beneficial solutions for the shareholders.
The retailer aims to open at least 300 Long Chau new stores to bring the total number of stores to about 700-800 by the end of 2022.
Responding to the shareholders’ questions about the competition between Long Chau and Pharmacity – the chain that is leading in the number of pharmacies, a representative of FRT says that each chain has different potentials and orientations, so it is difficult to compare. Pharmacity is currently the largest chain in the market and Long Chau takes that as a driving force for growth in the coming time. However, FRT prioritizes the efficiency, not quantity.
Xiaomi will account for 7-10% of the revenue
In response to the question of what is the driving force for FPT Shop when the demand for studying and working from home decreases after social distancing, the FRT representative says that although the demand decreases, the consumers have had the habit of using technology devices so the consumers using the product will be increased and rejuvenated, including students in high schools instead of just students in colleges as before. “In addition, there is a large number of consumers who want to upgrade their devices after 2-3 years of use, so we think this market always has potential,” says the representative of FRT.
On the question of how FRT benefits after FRT synnex signs a cooperation agreement with Xiaomi, FRT says that the fact that Xiaomi has a new distributor (meaning DigiWorld loses its monopoly on distribution of Xiaomi) enhances the diversification of products, betters the prices to be more competitive. So this benefits the market and the consumers. FRT evaluates Xiaomi as a large brand and has the most complete ecosystem in product ecosystems compared to other brands presenting in Vietnam. FRT expects Xiaomi will account for 7-10% of FPT Shop’s revenue.
In addition, the presence of TopZone (belonging to MWG) does not affect the growth rate of F.Studio. Because in terms of the market, there will be more participants, which will benefit the consumers. F.Studio will continue to expand and renew the business of Apple products in Vietnam. In general, FPT Shop still maintains double-digit growth in the period of 2022-2024.
FRT plans to open more than 70 new laptop centers to maintain its leading position in the laptop retail market. The Company will also open up to 100 new stores of FPT Shop to increase its coverage in densely populated areas; At the same time, they will also focus on testing PC Gaming selling points, researching virtual mobile network business models, investing in quality and speed of customer service.
The leaders of FPT Retail answer questions at the Annual General Meeting of Shareholders 2022.
Revealing the profit of the first quarter of 2022, FRT says that the first quarter of this year the Company records the revenue growth of 65%, the profit increases by 5 times compared to the same period last year. It is expected that in the near future, the growth rate will stabilize again, but FRT’s Board of Directors is confident to complete the revenue and profit plan in 2022.
The meeting unanimously approves the revenue plan of VND 27,000 billion – an increase of 20% compared to 2021 and a profit before tax of VND 720 billion – an increase of 30%. Thus, even though it is only the end of the first quarter of 2022, FRT has completed about 28% of the plan.
Paying stock and cash dividends
In 2021, FRT’s consolidated revenue increases by 53.4% to VND 22,494.96 billion and profit after tax reaches VND 443.9 billion, 44 times higher than that of 2020.
With the above results, FRT will pay dividend of 2021 in cash at the rate of 5% and stock dividend at the rate of 50%. In addition, the plan to pay dividend of 2022 in cash at the rate of 10% (VND1,000/share) is also approved.
In addition, FPT Retail will issue shares under the employee selection program (ESOP) based on the business results in 2022 at the value of 10,000 VND/share. Accordingly, after the Company exceeds the growth threshold of 20%, for every additional growth of 10%, the employees will be entitled to 1% ESOP, the maximum expected issuance rate is 2% of the number of outstanding shares at the time of issuance.
The transfer restriction period of these shares is 3 years and is free for transfer in each year after, specifically: at the end of the first year, 30% of the purchased shares will be freely transferable, at the end of the second year, 60% of the purchased shares will be freely transferable, and at the end of the third year, 100% of the purchased shares will be freely transferable.
FRT stock is currently at the value of VND 164,500/share (closed on April 15) and is one of the breakthrough growth stocks in 2021 and in the first 4 months of 2022. Compared to the beginning of 2022, this stock has increased by 65%, and if compared to the beginning of 2021, by 382%.
According to Tran Thu Thao, Nguoi Dua Tin
Published April 17th, 2022